Companies issue employee stock options as a form of compensation. Recently the Financial Accounting Standards Board (“FASB”) has issued a Statement of Financial Accounting Standards No. 123 (revised 2004) (“FAS123R”), which requires companies to expense those employee stock options. Under FAS123R, expensing requires an observable market price of an identical or similar equity instrument or if not available, an estimate of value using a model-based technique. Because the model-based techniques have certain limitations, what is needed for expensing employee stock options is an identical or similar equity instrument that has an observable market price.
The preceding description is not to be construed as an admission that any of the description is prior art relative to the present invention.